A big trick is on the horizon.As central banks run out ofbullets, the global economyis again slowing. There is aglobal setting of politicalunrest, terrorism, unprece-dented weather disasters,health epidemics and apresidential change loom-ing. In spite of these issues,credit is easy again andlenders are fighting to winloans that they shouldn’teven be writing. While the tipping point may be different fromthe last crisis, a collapse in the credit markets is gettingcloser and CRE will again not come away unscathed. Assetclasses that haven’t fully recovered from the last crisis andface headwinds even in good times, namely retail and subur-ban office, are most at risk to get hit first and hardest.Sectors that exhibit strong demographic trends and his-torical resistance to economic downturns are where thetreats will be found. Specifically, senior housing and medicaloffice have compelling and improving demographics withboth short- and long-term prospects that are attractive. The
65+ population in the US is projected to grow from 40 millionin 2010 to 71 million by 2030, a 78% increase. —Al Rabil,

Each month, the editors of FORUMpose a topical question to our Editorial Advisory Board members.

It’s October and we are officially in the third quarter. Some reports say
certain sectors are losing steam, while many others expect a continued
uptick. What areas of the CRE business will experience a “trick,” and
which will see a “treat”?

The fourth quarter historically has been volatile. Investors are realizing gains or losses for the
year based on their own tax needs—and October historically has been a month of extremes.
The fundamentals in the US economy are still solid, as proven by the record-breaking sales
of commercial properties here. We are still a safe haven for foreign investors. Jobs are gaining
overall and, as of this writing, we have not seen any major economic or political calamities.
Many have been waiting for some kind of correction, given the gains of 2013. This may be it.

I expect a moderate bounce back in the weeks to come.

Hotels may moderate somewhat, as the stronger US dollar could affect foreign tourism. I
don’t believe that will be true of the office sector, as wealth of the investors in that sector
makes them less vulnerable to periodic shifts. Retail also shouldn’t been too affected—
someone who is working will spend for the holidays, and the market won’t affect them as much.
We’ll be fine. —Faith Hope Consolo, Chairman-Retail Group, Douglas Elliman Real Estate

The continued upward trajectory of multifamily continues to defy the earlier
red flags about possible
overbuilding and prices
topping out in major markets, among other issues.
Positive fundamentals and
favorable demographics
are keeping that property
sector alive and well, with
across-the-board rent
growth, steadily increasing prices and low vacancy rates. Investors are pleased
with their returns.

The office sector in primary markets is doing well, with
prices sometimes spiking. Demographics, however,
including evolving work habits and demands for improved
environmental amenities are causing shifts in investment
strategies regarding spatial needs and geographies.
Retail and hospitality will continue to improve as long as
employment and the economy continue to recover.

The overall Halloween prognosis this year is, treats are
definitely the order of the day for the swift and the savvy;
tricks could quickly start to appear if interest rates suddenly spike.—David Kessler, National Director of
Commercial Real Estate, CohnReznick